Southeastern Cities Look to Max Out the Triple Bottom Line Returns of Recycling

Editor’s Note: This is the second post in a two-part series examining the recycling industry and job creation. In case you missed it, you can check out Part I here.

Recycling is a growth industry in the U.S. and around the world, with resource scarcity, cost reduction, and the basic human need and desire for clean, healthy air, land and waters all driving growth.

As was pointed out in Part I of this two-part series, the economic, as well as social and environmental, benefits of recycling are underappreciated and undervalued here in the U.S., where recycling rates lag those of other industrialized nations, however.

Under the aegis of the Southeast Recycling Development Council (SERDC), manufacturers with operations spanning 11 Southeast U.S. states have joined together to raise awareness and boost recycling rates. They’re not the only ones who see significant benefits and advantages from increasing recycling rates in the U.S.

Recycling: Profitable for businesses and governments alike

Way back in 2001, the groundbreaking U.S. Recycling Economic Information (REI) Study found that annual gross revenue for the U.S. recycling and reuse industry totaled some $236 billion and “is competitive with other major industries, e.g. food manufacturing, in employment and annual salaries.”

“[E]specially significant is the finding that recycling far outpaces the waste management industry because recycling adds value to materials, contributing to a growing labor force. Recycling also provides a large number of jobs that generally pay above the average national wage.”

There’s a strong multiplier effect at work in the recycling sector as well, REI researchers found. In addition to the 1.1 million Americans directly employed in the recycling industry as of 2001, there was an additional 1.4 million jobs with a total payroll of $52 billion in businesses supporting the recycling and reuse industry. Hence, some 2.5 million people around the U.S. relied on jobs in the recycling and reuse sector for their livelihoods.

The ripple effect of factoring indirect and induced impacts resulting from recycling is evident in South Carolina, where, “The total income impact of recycling is estimated to be $1.5 billion in 2005, which the State estimated would generate $30,604,726 in sales taxes and $38,674,883 in income taxes.”

Manufacturers look to boost recycling in the Southeast

The EPA’s regional overview of the economic impact and benefits of recycling and reuse is chock full of examples of local and regional businesses participating in SERDC and EPA initiatives. These include SP Newsprint Co. in Georgia; KW Plastics in Alabama; Coca Cola, which is operating one of the world’s largest PET (Polyethylene Terephthalate) recycling plants in Spartanburg, SC.; Recycling Marketing Cooperative of Tennessee (RMCT); Mohawk Industries in Georgia; and Atlanta’s Novelis, the world’s largest aluminum recycler.

These businesses need more recyclable material to feed their manufacturing operations. Curbside Value Partnership estimated that $1.2 billion worth of potential recyclable materials are thrown away in the eight states that make up EPA Region 4.

As SERDC’s Sagar highlighted:

“The Southeast is home to much of national manufacturing capacity that relies on recycled materials…Unfortunately, as far as recycling programs go, participation is poor. It’s problematic because much of the material that’s right here at hand is lost. Hence, manufacturers in the region have to look to other regions, and even overseas, for feedstock.”

Spurring greater participation in recycling seems like an intractable challenge, however. Back in 2006, Dwight Ensley, president of the Ensley Corporation in Reidsville, North Carolina stated:

“There are enough plastic bottles going into the landfills of the Carolinas to run our plastic recycling plant 24 hours per day, 7 days per week. But due to low recycling rates, we must ship plastic from all over the US including the West Coast, the Upper Midwest, and New England, as well as Canada, Mexico, and Puerto Rico. Although we are located in the Southeastern US, less than 50% of our supply comes from this region.”

From fixed fees to Pay-As-You-Throw

One means of spurring Americans to recycle more that is being explored is shifting from flat, fixed fee rate structures that municipalities have typically charged for waste disposal to a variable Pay-As-You-Throw (PAYT) rate structure based on the number of bags or cans of trash collected or, in some locales, their weight.

Implementing a PAYT rate for municipal solid waste (everyday household trash) creates a direct economic incentive to recycle more and produce less waste, proponents assert. Doing so entails municipalities charging a variable fee based on weight or volume for each trash bag or can picked up.

A survey in Iowa found recycling increased an average of 50 percent after PAYT was implemented. In Athens-Clarke County Georgia’s PAYT program, downtown businesses and residents pay $1 for each county-issued trash bags, while recycling bags are free. The two types of bags are clearly labeled “trash” or “recycle.”

There were over 7,000 PAYT programs across the U.S. as of 2006, representing about 25 percent of U.S. communities, according to the EPA. Collectively, they’re removing from 4.6 million to 8.3 million tons of municipal solid waste out of landfills, saving 61 million to 109 million MBTUs of energy and saving residents on disposal fees and property taxes.

As the EPA states in its Southeast Region 4 recycling fact sheet:

“By collecting more recyclable commodities from homes and businesses, the Southeast can help set the stage for the future expansion of current manufacturing operations that demand recycled material. That expansion will result in more jobs, increased tax revenue, and an overall brighter economic picture for the region. Recycling is a sustainable investment, one that reaps benefits for both your local community and the Southeast region as a whole.”

SERDC 120

SERDC’s efforts to spur recycling across the Southeast are ongoing. It’s currently in the final stages of a project that brings together manufacturers, NGOs, and state and local government agencies to better coordinate and raise the profile of recycling initiatives across the region.

SERDC 120 is a collective, 120-day effort to “engage industry in voluntary public-private partnerships to make strategic, one-time, leveraged investments that sustain higher levels of recovery through the adoption of proven best practices in municipal recycling programs.”

Drawing on the expertise of many of the leading packaging and recycling experts in the U.S., SERDC 120 members have been meeting to define clear opportunities with the potential to boost recycling rates. By pooling funds from those members who opt into a coordinated recycling effort, SERDC 120’s outcomes are expected to “result in recycling successes far stronger than individual investments alone,” the nonprofit organization states.

With the planning stage wrapping up in May, the initiative’s plan is to begin launching recycling projects in target Southeast cities in late 2014 through 2015 and beyond.

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